a.k.a. Congressional Bribes Suck
In the early 1970s, I remember my mom and dad debating whether we should fill up our car’s gas tank for $0.33 a gallon or drive a little further because the price might be $0.31. At the time, we were driving an American-made gas guzzler that would have had a curb weight of well over 3,000 lbs – not including the six occupants. During this time, my dad was an employee of the State of California and as such, a family of six living on a teacher’s salary in California did not push you over the poverty line very far so saving a few cents here and there made sense. Then, as now, food & gas – the products where most families spend much of their income – didn’t count in the CPI calculations and that wouldn’t much matter anyway.
This past week, while President Obama was extolling the financial merits of extending the Bush-era tax reductions on the much ballyhooed ‘middle class’, media outlets were reprising Warren Buffett’s ‘tax the wealthy’ faux challenge. Democrats and Republicans were exchanging barbs across the aisle trying to figure out who can pander to an electorate who has, since the installation of the Bush-era financial accountability deferral malfeasance of 1992 (complete with over 70 targeted tax breaks), evidenced a willingness to sell out the country for an extra $1 thousand bucks of somebody else’s money. Whether it is saving a few bucks at the pump in the 70s, getting a few bucks back on tax returns at the expense of the nation’s economy, or saving a few bucks at Wal-Mart, the single worst enterprise that has hit the consumption universe since humans evolved opposable thumbs, or at Buffett’s Dollar General, we seem to think that ‘a deal’ is something to which we’re entitled regardless of how that ‘deal’ came into being. For some reason, the generation born between 1930 and the Baby Boom, seems to share a rather extraordinary post-Depression frugal sense of acausal, synchronistic entitlement that seems to be resurging of late.
Which leads me to consider why Warren Buffett reminds me of my mom. It seems that both are eager to look for a deal. It seems that both are willing to consider a sense of shared responsibility in which there is room for generosity within a frugal self-discipline – both of them are extraordinarily willing to use their resources to help numerous others. By the way, whether it’s my mom’s work with Habitat for Humanity and similar causes, her tireless volunteerism or Warren’s philanthropic gestures (to say nothing for the generosity he’s encouraged in his children), I find this attribute most admirable and inspiring. And, while moderately aware that there are structural forces at play that make the system appear to be unsustainable, both seem to operate with a perspective that frankly puzzles the heck out of me. How on the one hand can social awareness be relatively high while consequence is so illusive? My parents work with future homeowners to build houses for the marginalized or under-employed – many of them displaced laborers who lost their jobs when U.S. manufacturing was sent overseas – yet they can still extol the merits of frugal shopping at the very stores that drove the production overseas. Warren can call for a tax on the rich to have ‘everyone pay their share’ yet Berkshire Hathaway’s largest public equity holdings are rife with corporations that are optimized for U.S. tax avoidance. Once financial resources are in their respective hands, they both do great things. But there seems to be a missing puzzle piece between frugal stewardship and the macro-system that is expanding economic imbalance at a remarkable pace.
In October 1973, during the U.S. airlift arming the Israelis during the Yom Kippur War in a program known as Operation Nickle Grass, OPEC countries decided to impose an oil embargo. They did so because they knew that Americans had become complacent with bloated oil supplies. To shock America into realizing the folly of its airlift, they reasoned, they’d discontinue or greatly curtail the supply of oil. Mind you, the Nixon Administration’s departure from the Bretton Woods Gold Standard accord had already added plenty of instability into the OPEC countries. Neither the Israeli-policy nor the oil-dependency lesson was learned. Part of the reason for this educational failure was due to the simple fact that Americans then, as now, live in remarkable ignorance of the interdependencies that support the supply chain for our consumptive excess. And while, for political expediency we decided to rename the Anglo-Persian Oil Company to the more palatable British Petroleum or BP by the end of the 70s because a certain friendly someone was no longer giving away his country’s wealth for the benefit of a few investors, we didn’t get more aware as a society.
Now, Warren Buffett’s Berkshire Hathaway has done well holding a big chunk of Exxon. And his Exxon holdings have, in a significant fashion, contributed to a modern political quagmire in Papua New Guinea where Exxon’s LNG program has fed on government corruption, forced community dislocation, and this week’s political unrest. Warren can be indifferent to this as he lives in Omaha – far from the people he’s raiding. And my mom is working to help take care of some of the Exxon displaced persons – corporate refugees. And for that effort, I salute her. But, until we realize that it is our duty as human beings to understand the cost WE place on this planet – including the mini lottery winnings we get from slashed prices and discounts – we’ll have more corporate refugees needing water in PNG and houses in Georgia and North Carolina.
Which leads me to my extreme disappointment in Congress. First of all, millionaires don’t create jobs, so enough with the blatant lies about tax breaks getting people employed. You want to buy votes from your constituents and donors. That’s fine but call it what it is. You want the “Silent Generation” and their Baby Boom and Generation X off-spring to fall for a few shekels when we all know that we’re already fiscally bankrupt. News flash… we know that opaque consumption got us into this mess. While your pandering may work for card-carrying AARP members, there are millions of us that are not suckered into your illusion so shape up. Why don’t you have the courage to stand up and tell us that the country is broke, that entitlements will be raided and curtailed, and that without a return to productivity, we’ll all be worse off than we were in 1973? Let all the Bush-era cuts expire. Starting with your own appropriations, start paying the country’s bills and ask us all to do our part.
And, Warren, here’s a better suggestion that would show that you care about this country. Why don’t you make an investment policy that mandates that EVERY Berkshire Hathaway public equity investment is predicated on insuring that no off-shoring of assets or revenues evade one dollar of legal tax collection or tax liability. You see, once the money gets to you, it doesn’t make that much of a difference. But if you had the courage to encourage corporations to build wealth (and have it taxed) in the U.S., you could really make a difference. So there it is – are you part of the Silent Generation or can you find the audacity to defy the odds and call for accountability where profiteering has enriched you?